Giles Capital Reads - Week 29

Two pieces this week sit on opposite sides of the market valuation debate, and Horace Dediu reframes big cloud companies' AI spending as a direct transfer of shareholder wealth to semiconductor companies. The One to save makes the contrarian case for European non-performing loans.

Cataloging Growth reconstructs a century of U.S. purchasing power from Sears catalogs and language models, finding real consumption grew 4x faster than official measures.

The Black Patch Tobacco Wars follows farmer organising against oligopoly pricing in early America, a historical episode that maps cleanly onto modern nicotine dynamics.

As models commoditize, the real scarcity shifts to auditors, editors and executives whose credibility validates AI outputs. The AI Power Class makes that argument.

Horace Dediu frames big cloud companies' AI spending as a direct transfer of shareholder wealth to Nvidia, Micron and Broadcom in why all are in.

Nick Maggiulli makes the case in stocks versus the dollar that U.S. equity returns reflect real value creation rather than currency effects.

Ben Carlson shows missing the best and worst days is near-impossible given how closely they cluster, undermining the case for market timing.

Same Process. Different Outcomes. uses a Motown parable to argue that holding duration matters far more than initial stock selection.

Barry Ritholtz pushes back on the bubble consensus in Overvalued, Bubble, or Revolution?, showing Mag 7 valuations are still cheaper than dot-com peaks and that earnings have kept pace.

John Hussman reconciles extreme valuation risk with a finding that speculative bubbles contain brief constructive phases accounting for almost all returns in Mountain, Cliff, or Ocean.

Two incentive-based ideas lays out the case for CODI and KYVO through an incentive-alignment lens, with concrete valuation work on both names.

Memory Complex Update separates forced Korean retail selling from fundamental deterioration in memory chips, with a tiered DRAM-NAND trade thesis built on precise margin analysis.

Wimbledon debentures as a real-asset investment, with historical mechanics and a pandemic-era mispricing case study that rewards curious generalists. Weird and wonderful debentures.

Eric Pachman on the Excess Returns podcast explains why the headline jobs picture masks real weakness and which leading indicators tell a different story.

The Yet Another Value podcast builds an activist thesis on $CBZ, making the case against buybacks and for restarting M&A with concrete capital allocation math.

Rich Pzena on building an $80bn deep-value firm, surviving brutal underperformance, and buying stocks below 10x normalised earnings. Behind the Balance Sheet.

Power and land rather than graphics chips turn out to be the real AI bottleneck, per a semiconductor analyst on Monetary Matters Network. Semiconductors Are Gushing Cash.

The non-performing loan market in Europe has been written off twice, first after the sovereign debt crisis and then as rates rose and the simple trade looked over. This piece argues both dismissals missed a structurally cheap, antifragile sector where AI is compressing servicing costs at precisely the moment most allocators have stopped looking. The NPL Industry: Left for Dead, Antifragile, and Cheap.

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Disclaimer: This newsletter is for informational purposes only and not investment advice. The intro reflects my views, while investment summaries are my interpretations of original authors' analyses. Information may not be fully verified and is subject to correction. Original authors' complete views may differ. Always do your own research before making investing decisions.